The property on 11 lower floors of the 101-story Lakeshore East tower has been delayed by supply chain issues and was most recently pushed back because of Alinea Group dropping its plan to oversee the hotel’s food and beverage offerings, said Rob Pontarelli, senior vice president of marketing for Chicago-based Magellan, the tower’s developer. “Because of Alinea dropping out, we had to re-evaluate the designs for some of the hotel space,” he said.
While the hotel’s rooms are mostly completed, work is underway to build out a fine-dining restaurant that is likely to be run by Lettuce, according to sources familiar with the plans. Pontarelli said the restaurant operator has not been determined but added that “we anticipate an announcement shortly.”
The Jeanne Gang-designed tower at 363 E. Wacker Drive has seen plenty of changes since Magellan first broke ground in 2016. The project was known as the Wanda Vista Tower then, but the Wanda name was later removed after Chinese conglomerate Wanda Group bowed out and eventually sold its 90% stake in the development to Magellan and partners Goldman Sachs and J.P. Morgan.
Wanda had been in line to operate the hotel until Magellan struck respective deals in 2020 with St. Regis Hotels & Resorts and Alinea for the hotel and restaurant operations. Then Alinea walked away last year, blaming staffing shortages and supply chain issues caused by the pandemic.
The turbulence has frustrated some people who had signed contracts to buy condominium units in the tower, including a few who sued to back out after Wanda’s departure from the project. Condos in the tower range from $1 million to $18.5 million, and sales have been relatively slow amid a sluggish downtown condo market.
The loss of a renowned operator in Alinea likely didn’t help, and it’s unclear how buyers would respond to Lettuce stepping in.
The developer has been tight-lipped about the number of condos sold in the building, but using the records of the Cook County clerk and Midwest Real Estate Data, Crain’s estimates that 163 units have been closed. The sales team has marked another 18 as “contract pending.”
If Crain’s estimate is accurate, a combined total of 181 units at St. Regis are sold or under contract, or about 51% of the building’s 353 units.
A Lettuce spokeswoman did not respond to a request for comment.
The latest delay in opening the hotel costs the property the opportunity to debut during the peak summer travel season and at a time when leisure travel has come back strong from the pandemic doldrums. Yet downtown hotel owners are still struggling overall, with occupancy still well below 2019 levels. Higher costs of labor and goods have shrunk hoteliers’ margins, problems that could ease to some degree by the time the St. Regis Chicago opens.
Crain’s residential real estate reporter Dennis Rodkin contributed.
